Why Yellen Should Be Next Fed Chief: Former Fed Official

Robert Heller, former Federal Reserve governor, tells CNBC why he sees Janet Yellen as both the best qualified and the most likely successor to Ben Bernanke if he does leave the Federal Reserve at the end of January.

Vice-chair of the Federal Reserve Janet Yellen is by far the most credible successor to central bank chief Ben Bernanke, former Fed Governor Robert Heller told CNBC on Wednesday.

Heller's call comes amid talk that Bernanke could leave his post at the end of his term in January after U.S. President Barack Obama hinted at the Fed chief's departure in a television interview on Monday.

"She has been a Fed insider for a long time... She has earned the job and is well qualified and Obama is also under pressure to nominate more women, so he would have to tell his own constituency that Janet wasn't qualified and she is," he added.

Heller said that if Yellen, who is known for her dovish stance on monetary policy, becomes Fed chief she could surprise markets with some bold initial moves.

"There is that irony that if someone is known as a dove, they first have to show that they are tough. So one would expect some of her early actions would be to surprise people on the hawkish side just to show she is macho," he added.

A two-day Fed meeting ends later on Wednesday and is hotly anticipated as markets try to assess the Fed's next move.

Heller said he expected the Fed to start unwinding its monetary stimulus in December.

"I think tapering will start in December or a bit earlier, the economy is doing reasonably well, muddling through with 2 percent growth. The Fed has leeway to start tapering off, if it were me I would start tapering right away," said Heller.

He said that the biggest risk regarding the end of quantitative easing was not ending the program.

"The biggest risk is continuing down this road and saying just a little bit more and all will be well. All will not be well," said Heller.

"We are building up enormous Federal debts and the Federal Reserve is buying up the entire Fed deficit and it's being added to the enormous debt load that the country is under… that is a road to a disaster in the long run," he added.